Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Earlier studies of health inequality across European countries have shown intriguing results, in particular with respect to retirement status as one of the determinants of health inequality. A priori one would expect that inequality in health and income would be associated.

Theory suggests that health deteriorates with age, in particular for low income groups. Moreover, as income declines after retirement, elderly people tend to rank lower in the relative income ranking. Consequently, retirement status, and in particular early retirement due to health problems, is expected to contribute to inequalities in income-related inequalities in health.

It is the purpose of the paper to look further into the contribution by retired Europeans to income-related inequalities in health. The study is based on data from the 3rd wave of the European Community Household Panel (ECHP) from 1996 which is a panel study based on a standardised questionnaire for interviewing a representative sample of households and individuals in 12 EU countries. The data includes a question about self-assessed health with five response categories.

The econometric analysis of self-assessed health is based on the interval (grouped data) regression model. Our approach is to use scores to scale the threshold values between intervals of SAH using a non-parametric approach applied to the HUI-3 in a 1994 Canadian survey, National Population Survey. Income-related inequality in health is measured using a concentration index, defined as twice the area between the concentration curve and the diagonal in a diagram with individuals ranked by income on the horizontal axis and the cumulative score of health on the vertical axis. A concentration curve below the diagonal is associated with a positive value of the index, indicating that good health is distributed disproportionally in favour of the high income individuals. A decomposition of the index into its determinants allows a calculation of the contribution of each determinant’s separate contribution to inequality in health. Results indicate that income inequalities contribute significantly to income-related inequalities in health in all EU countries, although to a varying degree, and other factors contribute as well. The contribution of occupational status as retired varies substantially across EU countries, which to a certain extent may be explained by different income levels among retired compared to the income of those who are in the labour force. In particular Denmark and Finland, as the only representatives of Nordic countries, show results that deviate from the rest of the EU countries. Thus, the over-all income-related inequality in health would be reduced by 82% in Denmark and 55% in Finland if income had been equally distributed among retired and non-retired in these countries. Greatest contribution comes from the oldest among the retired. The problem may disappear as younger age groups among the retired have better pension schemes compared to the oldest.